Indonesian Needs to Strengthen Its SMEs Facing AEC: World Bank

Yogyakarta (Antara Bali)- The World Bank said the Indonesian government needs to strengthen the country's small and medium  enterprises (SMEs) ahead of the implementation of the ASEAN Economic Community (AEC).

AEC, to be marked with regional free trade scheme toward the forming of a single economic community in this region, is to be implemented by the end of 2015.  

"Immediate strengthening especially in the small and medium enterprises sector is needed such as by starting giving them access to market in addition to capital assistance," Wold Bank economist Ahya Ihsan said in a discussion  and Quarterly Report of Indonesian Economy  at the Gajah Mada University  here on Thursday.

Ihsan said currently the biggest challenge to be faced by Indonesia ahead of AEC implementation is domestic problem including the preparedness of business players, gaps in infrastructure and skills , and the need for regulatory reform to reduce corporate costs.

He said the government could take a proactive role by helping companies prepare themselves as practices by Singapore and Malaysia.

The governments of the two countries help SMEs in promoting their products in international markets.  

"SMEs involvement  and presence in international markets  should have started at present," he added.    

In entering AEC in 2015, Indonesia would have an advantage of much larger market access  and would have goods and services with higher quality to increase its economic productivity, he said.

"Trade cost would also be much cheaper," he added.

He said, according to the result of a study by the Asian Development Bank (ADB), implementation of AEC would result in a net increase of 14 million jobs until 2025 in ASEAN including Indonesia. (WDY)